Answer to Question #136120 in Macroeconomics for Bokang

Question

GDP at market prices
Net primary income payments to the rest of the world
Indirect taxes
Subsidies
R397bn R37bn
R23bn R11bn
© The Independent Institute of Education (Pty) Ltd 2020
Page 6 of 7

20 2020
Consumption of fixed capital R32bn
Q.3.1 Calculate the value of gross national income (GNI) at market prices. (3)
Q.3.2 Calculate the value of net national product (NNI) at market prices.

Answer 1

3.1. Gross National Income at Market Prices

GNI = GDP at Market Prices + Net Primary Income payments to rest of World

= R397bn + R37bn

= R 434 bn

3.2. Net National Product at Market Prices ( NNI)

= GNI at Market Prices - Consumption of Fixed Capital

= R 434 bn - R 32 bn

= R 402 bn

3.3. NNI at Factor Cost

NNI = NNI at Market Prices - Indirect Taxes + Subsidies

= R 402 bn - R 23 bn + R 11 bn

= R 390 bn